National Port and Maritime Sector Policy soon

By Ishara Gamage

Sri Lanka will introduce a national Port and Maritime Sector Policy shortly, Sri Lanka Port Authority (SLPA) MD, H. D. A. S. Premachandra said Yesterday.

Addressing the Ceylon Association of Shipping Agents (CASA) forum in Colombo he insisted on the importance of having a solid, unchanged policy framework for effective decision-making.
“We will launch our national Port and Maritime Sector Policy framework somewhere around mid this year on a multi-level, multi-sector, multi-stakeholder approach”, he stressed.

According to him, sector liberalization was also one of the main sections of the proposed Policy.
“Liberalization is a controversial issue and we must handle it carefully. Most members of CASA might resist it. However, a significant number of our other stakeholders support the move”, he said.
Minister of Ports and Shipping, Mahinda Samarasinghe recently criticized the proposed changes to the Shipping Sector outlined in the 2018 Budget, as being a move towards liberalization and said he was totally against it as it might be a threat to the local shipping industry.

SLPA, MD also urged Port and Maritime Sector stakeholders to work together to eliminate bribery and corruption in the industry. “Bribery and corruption might be considered as an extra tariff to the industry; therefore, we must collectively eliminate it by avoiding any type of ‘giving and taking’ of bribes”, he asserted.
He also noted that the newly opened US$1.2 billion India’s Jawaharlal Nehru Port(JNPT), the Bharat Mumbai Container Terminals (BMCT) might not be a major threat to Sri Lanka as Sri Lanka serves a different niche market in the East Coast Indian Ocean maritime boundary.

JNPT faced severe congestion due to shortage of Terminal facilities. This project was to be launched in 2006, but came on stream only in 2017 /2018, injecting much needed capacity. This will allow JNPT to improve service quality and for India to further facilitate its import and export trade. Connected with the dedicated freight corridor and connected road facilities, JNPT will come back to compete with Mundra Port which managed to grab a large share of traffic during the last decade, primarily due to the lack of capacity at JNPT.

Premachandra also said, “Every time a new Port or Terminal comes up in India, we in Colombo wonder as to what would be the impact of this development. JNPT and its Terminals handle gateway cargo and not transshipment. On the other hand, the West Coast of India is not a major contributor to Colombo’s transshipment business. The main catchment area is the South and East coast of India. The reason is very clear when you look at the statistics”.

In 2014, 9.2% of the West Coast of India’s gateway volumes was handled by direct main services. By 2018, this share may have further increased. Thus the share of TS is less than 8% of the total throughput. Out of this around 30% (2.4% of the total) is handled by Colombo. Here too the main portion is not generated by JNPT. The East Coast of India has a 71% share of Feeder calls to transshipment hubs.

“Colombo serves a niche market in respect of the West Coast of India in that it caters to those destinations that are not covered by direct calls and the spillover due to low frequency of direct calls. With the new capacity, more direct calls will be facilitated. However, Colombo would still cater to the niches.I believe the impact to be negligible”, he noted.
“However, the major threat would be the direct services to emerging deep water ports in the East Coast of India, where we have a market share of 33%. Direct calls to East Coastal Ports carry only 29% of the traffic generated by the region today. This too will increase further”, he added.

Despite the current proposed National Port and Maritime Sector Policy preparation work , the Asian Development Bank (ADB) recently said they might move away from the Colombo Port East Container Terminal (ECT) project if the Government was no longer interested in completing it, noting that they had many other projects in several other countries to attend to.

Meanwhile, speaking in this regard to Ceylon FT SLPA MD said, they were awaiting a final decision from the Government.
In early 2016, SLPA and ADB implemented a mandate letter setting out the terms of ADB’s appointment as transaction advisor to SLPA in relation to the project. ADB selected Sumitomo Mitsui Banking Corporation (SMBC) to act as its co-advisor.